May 8, 2010--PLATTSBURGH -- The would-be developer of a
waterfront hotel in downtown Plattsburgh has lost a critical incentive
from the state.

A tax credit of $1.35 million for developing a once
environmentally contaminated site has been taken away from Syracuse
developer James Monahan for lack of progress on the project.

CLEANUP STALLED

The tax credit was granted in 2004 by the State Department of
Environmental Conservation and would have gone toward the developer's
income-tax liability.

But DEC removed the credit in mid-March, citing a lack of
action on remediation of the property.

CITY WANTS LAND BACK

With the tax credit gone, the City of Plattsburgh hopes its
attempt to regain control of the property picks up momentum in court.

"This tax credit was a major inducement for any developer to
build a hotel at that location, and the elimination of this credit
leaves no incentive for any other developer to buy the rights to
develop that property from Mr. Monahan," Mayor Donald Kasprzak said
Friday.

Monahan signed an agreement with the city in 2004 to build a
$14 million high-end hotel and conference center on the property off
Bridge Street, behind the former D&H Railroad building.

The site was the former railyard for D&H and later
Canadian-Pacific Railway.

CITY INVESTMENT

The city, with the aid of state funding, cleaned the site up
in the early 2000s and constructed a new parking lot, which has since
remained unused.

Monahan began preparing the ground for the site in 2006, but
progress on the project stalled after he failed to line up a hotel
chain or an independent operator.

The city went to court in late 2007 to have the contract with
Monahan terminated, but the case is still pending.

BUYOUT SOUGHT

Kasprzak said Monahan's attorney recently contacted City
Corporation Counsel John Clute to discuss a possible buyout.

Monahan told the city he has invested $791,000 in the project
so far, but the mayor declined to entertain a buyout discussion.

"He made a commitment to the city, and the taxpayers paid for
the infrastructure improvements at the site, including the parking lot
and lights, and he did not fulfull his obligation to the city,"
Kasprzak said.

"No way in good conscience could I support a buyout at this
level at taxpayers' expense."

OTHER IDEAS

Kasprzak said he hopes the loss of the tax credit will
strengthen the city's court case to have the contract terminated.

If that happens, the city will look for another developer.

"We would like to pursue this, and we would even like to
consider possibilities other than a hotel," the mayor said.

"Perhaps some sort of indoor recreation facility, retail
outlets or a cluster of restaurants and shops. The council will be
directly involved in any future decision with this property."

The city can re-apply for the tax credit if it gets another
developer, the mayor said.

Monahan did not respond Friday to inquiries from the
Press-Republican for comment.

E-mail Joe LoTemplio at: jlotemplio@pressrepublican.com

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